Reuters broke the news that the U.S. securities regulator has opened an inquiry into Wall Street’s blank check acquisition frenzy and is seeking information on how underwriters are managing the risks involved, in the strongest sign yet that the U.S. Securities and Exchange Commission is stepping up scrutiny of such deals and the banks that underwrite them. Reuters also provided insight on how several leading European startups, including Europe’s most valuable fintech startup Klarna, are steering clear of SPACs, or special-purpose acquisition companies. Their caution, driven by fears over heavy costs and regulation, underscores the potentially risky nature of this innovative form of financial alchemy.
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